SYAL & ASSOCIATES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE service tax stands confirmed against the applicants/appellants on the allegation and finding that they have provided manpower service to M/s. Punjab Tractors Ltd.

(2.) Assailing the said order, learned Advocate appearing for the applicants draws our attention to the agreement entered between the appellants and M/s. Punjab Tractors Ltd. As per the said agreement, the appellants are required to transport the tractors manufactured by M/s. Punjab Tractors Ltd. to their depots located at various places. The appellants have engaged their own drivers for conducting the said activity. The rates involved between the appellants and M/s. Punjab Tractors Ltd. are on per km basis and inclusive of expenses required to be incurred in transportation of such vehicles i.e. price of the diesel, driver's wages, return bus/rail fares, incidental expenses etc. Further though the insurance is undertaken by M/s. Punjab Tractors Ltd., in case accident, it is responsibility of the appellants to arrange spot survey, lodge FIR and forward all related documents which will facilitate lodging of claim with the insurance company. It is further seen from the said agreement that the drivers shall cover a distance of 250 km per day. As against the above, learned SDR appearing for the Revenue has drawn our attention to the Board's letter dated 30 -7 -2008, which stands relied upon by the adjudicating authority. As per the said letters providing drivers to either manufacturers or dealers for driving the vehicles to the dealers or purchasers, for a consideration has been held to be service under the category of manpower recruitment or supply agency. After careful consideration of submissions of both sides, we find that appellants are not merely supplying the drivers to the M/s. Punjab Tractors Ltd. in which case the letter referred to by the adjudicating authority may be held to be 'prima facie' applicable. In the present case, the agreement between the appellants and the receiver is for transporting the vehicle manufactured by them on principal to principal basis and for a consideration, which is based upon the per km run of the vehicle. As such, at this prima facie stage, we agree with learned Advocate that that the activity undertaken by the appellant cannot be held to be falling under the manpower supply agency so as to tax the same under the said category. We accordingly dispense with condition of pre -deposit of both the cases.